Quantitative Analysis BA 452 Supplemental Questions 310 7.Investment Advisors, Inc., is a brokerage firm that manages stock portfolios for a number of clients. A particular portfolio consists of U shares of U.S. Oil and H shares of Huber Steel. The annual return for U.S. Oil is $3 per share and the annual return for Huber Steel is $5 per share. U.S. Oil sells for $25 per share and Huber Steel sells for $50 per share. The portfolio has $80,000 to be invested. The portfolio risk index (.50 per share of U.S. Oil and 0.25 per share for Huber Steel) has a maximum of 700. In addition, the portfolio is limited to a maximum of 1000 shares of U.S. Oil. The linear programming formulation that will maximize the total annual return of the portfolio is as follows: 𝑀𝑀𝑀𝑀𝑀𝑀3𝑈𝑈+ 5𝐻𝐻𝑀𝑀𝑀𝑀𝑀𝑀𝐶𝐶𝑀𝑀𝐶𝐶𝑀𝑀𝑠𝑠𝑡𝑡𝑡𝑡𝑡𝑡𝑀𝑀𝑡𝑡𝑀𝑀𝐶𝐶𝐶𝐶𝐶𝐶𝑀𝑀𝑡𝑡𝑟𝑟𝑠𝑠𝑡𝑡𝐶𝐶𝑟𝑟𝐶𝐶𝑠𝑠.𝑡𝑡.25𝑈𝑈+ 50𝐻𝐻 ≤80,000 𝐹𝐹𝐶𝐶𝐶𝐶𝑎𝑎𝑠𝑠𝑀𝑀𝑎𝑎𝑀𝑀𝐶𝐶𝑡𝑡𝑀𝑀𝑏𝑏𝑡𝑡𝑠𝑠0.50𝑈𝑈+ 0.25𝐷𝐷 ≤700 𝑅𝑅𝐶𝐶𝑠𝑠𝑃𝑃𝑀𝑀𝑀𝑀𝑀𝑀𝐶𝐶𝑀𝑀𝐶𝐶𝑀𝑀1𝑈𝑈≤1000 𝑈𝑈.𝑆𝑆.𝑂𝑂𝐶𝐶𝑡𝑡𝑀𝑀𝑀𝑀𝑀𝑀𝐶𝐶𝑀𝑀𝐶𝐶𝑀𝑀𝑈𝑈,𝐻𝐻 ≥0The computer solution of this problem is shown in Figure 3.14.